Picking our Pockets

The Sacramento Bee is reporting a deal to increase the local sales tax to fund a new sports arena. Here is the "deal", and its supporters are telling us about this with a straight face. The proposal would raise the sales tax by a 1/4¢ - which yields $1.12 billion over the next "several years" Half the dough goes to the arena and half to "other projects" (Perhaps Mayor Fargo's driver?)The Maloofs contribute $20 million to build the arena (which amounts to about a 5% involvement) - but they agree to increase their total participation in the deal to "25-30%" (hmm, wonder why the 1/4¢ is so specific and this is not?) The Maloofs give us a 30 year lease on the facility. (Which of course when the team starts to falter in the next couple of years they will reneg on.)
And in the end the city owns this white elephant of the arena.

First, let's start with the positive case. If all of this goes as planned - for about $450 million we will have a new sports arena and a development of a key piece of real estate.(Don't bother to compute the per square foot cost of this turkey, it would make the highlights of the Golden Fleece awards.) Possibly we would also have some civic improvement projects. (Although the history in this area is not good - remember when we did a bond deal several years ago for a new sports complex and when it did not materialize the money went into the ether.) The rail yards is a natural place for a grand development. In reality the cost of this is much larger and it is only borne by residents of Sacramento County. What is unclear is whether this prime piece of real estate would naturally develop over time without the increase in the sales tax. The current levels of downtown development - like the towers which had ground broken for today - seem like a much more likely lever to get the area in the rail yards developed and without cost of raising sales taxes and giving the council and the board a blank check.

The real contribution by the Maloofs should be put in present value and that would discount the real contribution of what they have offered.

The supporters on the Bee comment site suggested that if we do not do this Sacramento will be a "cowtown." But why would Sacramento be any more of a cowtown if our second rate basketball team were to run away to Las Vegas? Why should we try to hold this private enterprise which is showing a declining fan support? This seems a lot like trying to hold on to a buggy whip manufacturing plant in the dawn of the automobile age. If you don't believe the Kings are declining in popularity why would they be actively soliciting season ticket holders (and they are)? It seems to me that the bigger rubes would be the people who agree to construct a Taj Mahal at their expense for the benefit of someone else.

If the Kings need a new arena, let them build it.

Gee, I wonder if the voters of Sacramento are as stupid as the supporters of the project think we are.